Critical Control Energy Serviceshttp://criticalcontrol.com
We Are Today's Digital OilfieldFri, 11 Aug 2017 14:07:08 +0000en-UShourly1https://wordpress.org/?v=4.8Critical Control Announces Second Quarter 2017 Financial Resultshttp://criticalcontrol.com/corporate/critical-control-announces-second-quarter-2017-financial-results/
Thu, 10 Aug 2017 15:46:43 +0000http://criticalcontrol.com/?p=2712CALGARY, ALBERTA, August 9, 2017 – Critical Control Energy Services Corp. (TSX: CCZ) today reported its financial results for the three and six months ended June 30, 2017. “In light of emerging positive trends with our software business and our investment in research and development in the past year, our focus for the remainder of […]

]]>CALGARY, ALBERTA, August 9, 2017 – Critical Control Energy Services Corp. (TSX: CCZ) today reported its financial results for the three and six months ended June 30, 2017.

“In light of emerging positive trends with our software business and our investment in research and development in the past year, our focus for the remainder of 2017 and 2018 will be in sales and marketing to increase penetration into our strong North American client base,” said Alykhan Mamdani, CEO of Critical Control.

Revenue

Industry driven revenue decline stabilized in the quarter with total revenue of $7.6 million compared to $7.8 million in the second quarter of 2016.

Strong recurring revenue in the Corporation’s Software segment together with growth driven from the continued penetration of the Corporation’s software in both Canada and the United States offset declines from shut in wells and the cost saving measures implemented by industry. Accordingly, Software revenue in the second quarter remained steady at $4.3 million in 2017 compared to $4.3 million in 2016.

Industry factors and the subsequent competitive environment continue to impact the Corporation’s recurring revenue from its Services business, which generated US$1.7 million in revenue in the second quarter of 2017, a 11.8% decrease from the previous period.

Gross margin

Management’s reengineering of the business has allowed the Corporation to exit the downturn in a more competitive position with gross margin increasing from 40.0% in 2016 to 45.8%.

Gross margin in Software improved from 55.9% to 63.5% despite a strong competitive environment and pressures to provide price concession.

The Corporation’s fabrication business gross margin went from negative 57.6% in 2016 to positive 3.0% in 2017, the total gross margin in Measurement Services continued strong at 24.3%. This resulted from management’s focus on streamlining the Services operations in the first half of 2016.

Earnings and net earnings

The Corporation’s loss before tax in the second quarter is consistent at $0.7 million despite an unrealized foreign exchange loss in the second quarter of 2017 of $0.4 million. EBITDA, adjusted for this unrealized foreign exchange loss increased from $0.5 million in the second quarter of 2016 to $0.9 million in the second quarter of 2017.

Outlook and Guidance

The decline in energy prices in 2015 resulted in oil and gas producers shutting in production, reducing operating costs associated with the Corporation’s services, demanding price reductions and in certain cases, filing for creditor protection in 2016 and early 2017. These factors combined with competitive pressures from other service companies negatively impacted the Corporation’s revenue throughout 2016 and early 2017, with such declines appearing to ebb in the second quarter of 2017.

Notwithstanding the foregoing, the Corporation has further penetrated its client base with its software solutions and reengineered its operations to reduce costs to maintain, and in some cases grow, its margins.

The impact of the Corporation’s internal business process reengineering and reorganization in 2016 are evident in the Corporation’s results in the first half of 2017 with improved gross margins and reduced general and administrative expenses. Management is optimistic that these margins are sustainable through 2017 at today’s commodity prices and will continue to improve in the event industry activity increases. Notwithstanding the foregoing, commodity prices or increased competitive pressures are unpredictable and a material change will affect profitability.

Simultaneous with cost saving measures, the Corporation has continued its investment in enhancing its existing software portfolio and adding new software products to reduce energy producer’s cost and risk. Management intends on continuing this investment during 2017. The growth from these initiatives has enabled the Corporation to offset reduced revenue from its existing products during the downturn in 2016 and management expects this investment to differentiate the Corporation from its competitors and provide an avenue of growth regardless of industry conditions in 2017. This expectation is based upon the Corporation’s ability to develop its software on a timely basis, bring it to market cost effectively and to successfully penetrate the Corporation’s existing client base with new software capabilities to address existing costs and operational risks.

Subsequent to the end of the second quarter of 2017, the Corporation completed a private placement of preferred shares for gross proceeds of $2.0 million. The completion of this offering increases the Corporations immediate liquidity and working capital, and in the opinion of management, based upon current industry conditions and progress in the Corporations business, is sufficient working capital to meet the Corporations stated objectives in 2017 and 2018.

About Critical Control

Critical Control provides solutions for the collection, control and analysis of measurement and operational data related to oil and gas wells across North America. We provide services to capture the data, cloud based software to visualize and manage it and the business intelligence to make quicker and more informed operational decisions.

]]>Critical Control Provides Update Regarding Trading of Common Shareshttp://criticalcontrol.com/corporate/critical-control-provides-update-regarding-trading-common-shares/
Wed, 19 Jul 2017 13:29:50 +0000http://criticalcontrol.com/?p=2707CALGARY, ALBERTA, July 18, 2017 – Critical Control Energy Services Corp. (“Critical Control”) (TSX:CCZ) provides an update regarding the trading of its common shares on the Toronto Stock Exchange (the “TSX”). Under Critical Control’s previously-announced plan of arrangement, which closed on July 6, 2017, some shareholders made an election to keep their common shares, rather […]

]]>CALGARY, ALBERTA, July 18, 2017 – Critical Control Energy Services Corp. (“Critical Control”) (TSX:CCZ) provides an update regarding the trading of its common shares on the Toronto Stock Exchange (the “TSX”).

Under Critical Control’s previously-announced plan of arrangement, which closed on July 6, 2017, some shareholders made an election to keep their common shares, rather than exchange their common shares for cash or preferred shares. Those common shares resumed trading at the open of the TSX on July 17, 2017.

About Critical Control
Critical Control provides solutions for the collection, control and analysis of measurement and operational data related to oil and gas wells across North America. We provide services to capture the data, cloud-based software to visualize and manage it, and the business intelligence to make quicker and more informed operational decisions.

]]>Critical Control Completes Plan of Arrangement and Private Placementhttp://criticalcontrol.com/corporate/critical-control-completes-plan-arrangement-private-placement/
Thu, 06 Jul 2017 17:01:09 +0000http://criticalcontrol.com/?p=2701CALGARY, ALBERTA, July 6, 2017 – Critical Control Energy Services Corp. (“Critical Control” or the “Corporation”) (TSX: CCZ) announces that it has completed the proposed plan of arrangement approved by the shareholders of the Corporation (the “Plan of Arrangement”) at the Corporation’s annual and special meeting held in Calgary on June 29, 2017 (the “Meeting”) […]

]]>CALGARY, ALBERTA, July 6, 2017 – Critical Control Energy Services Corp. (“Critical Control” or the “Corporation”) (TSX: CCZ) announces that it has completed the proposed plan of arrangement approved by the shareholders of the Corporation (the “Plan of Arrangement”) at the Corporation’s annual and special meeting held in Calgary on June 29, 2017 (the “Meeting”) after obtaining final approval from the Court of Queen’s Bench of Alberta (the “Final Order”).

Prior to the completion of the Plan of Arrangement, there were 58,662,892 common shares of the Corporation outstanding. Subsequent to the completion of the proposed Plan of Arrangement, there are 43,934,032 common shares outstanding after 67,667 common shares held by odd lot shareholders were redeemed for $0.155 each in cash and 14,661,193 shares were exchanged for a total of 1,136,245 preferred shares.

The Corporation has also closed the private placement of preferred shares announced by the Corporation on May 11, 2017 and June 29, 2017 (the “Private Placement”). Pursuant to the Private Placement, an additional 1,013,000 preferred shares will be issued for gross proceeds of $2,026,000. The directors of the Corporation participated in the Private Placement and subscribed for 375,500 preferred shares for gross proceeds of $751,000.

Anyone trading in the shares of the Corporation is warned that any common shares acquired before the share exchange under the Plan of Arrangement is reflected in the trading of the common shares, a notice for which will be issued, are subject to an automatic exchange of the common shares acquired into preferred shares of the Corporation pursuant to the Plan of Arrangement.

Risk Factors Relating to Listing of the Preferred Shares
The Corporation has received conditional approval to list the preferred shares that were issued pursuant to the Plan of Arrangement and the Private Placement on the TSX, subject to the Corporation furnishing certain documentation evidencing that the preferred shares meet the minimum listing requirements of the TSX.

In the event the Corporation is unable to meet the minimum listing requirements of the TSX, or in the alternative, obtain a listing for the preferred shares on the TSX Venture Exchange or the Canadian Securities Exchange, within 120 days of the Final Order, the exchange of common shares for preferred shares under the Plan of Arrangement shall be reversed in accordance with the terms of the Final Order.

About Critical Control
Critical Control provides solutions for the collection, control and analysis of measurement and operational data related to oil and gas wells across North America. We provide services to capture the data, cloud-based software to visualize and manage it, and the business intelligence to make quicker and more informed operational decisions.

]]>Critical Control Announces its Annual and Special Meeting Voting Results and Provides Update Regarding Plan of Arrangement and Private Placement Closinghttp://criticalcontrol.com/corporate/announces-annual-special-meeting-voting-results/
Fri, 30 Jun 2017 16:36:32 +0000http://criticalcontrol.com/?p=2687CALGARY, ALBERTA, June 29, 2017 – Critical Control Energy Services Corp. (“Critical Control” or the “Corporation”) (TSX: CCZ) announces that all the motions put forth at its annual and special meeting held in Calgary on June 29, 2017 were approved by the shareholders. The detailed results of the voting are as follows: 1. The number […]

]]>CALGARY, ALBERTA, June 29, 2017 – Critical Control Energy Services Corp. (“Critical Control” or the “Corporation”) (TSX: CCZ) announces that all the motions put forth at its annual and special meeting held in Calgary on June 29, 2017 were approved by the shareholders. The detailed results of the voting are as follows:

1. The number of directors to be elected at the Meeting was fixed at not more than six. Proxies were received with:

Votes For

Percent

Votes Withheld

Percent

35,487,994

100

0

0

2. Each of the following director nominees proposed by management of the Corporation was elected. Proxies were received with:

Votes For

Percent Votes

Withheld

Percent

George Watson

35,049,938

98.58

503,672

1.42

Dennis Nerland

34,442,327

96.87

1,111,283

3.13

Alykhan Mamdani

34,402,327

96.76

1,151,283

3.24

Gary Bentham

35,173,438

98.93

380,172

1.07

Kevin Lo

35,331,894

99.38

221,716

0.62

Nizar Jaffer Somji

34,965,692

98.35

587,918

1.65

3. KPMG, LP was re-appointed as auditor of the Corporation and authorization was granted to the directors to fix the remuneration of such auditor. Proxies were received with:

Votes For

Percent

Votes Withheld

Percent

35,580,386

100

1,006

0

4. The proposed plan of arrangement, as set forth in Schedule C to the accompanying Management Information Circular of the Corporation dated May 26, 2017 (the “Plan of Arrangement”) was approved by special resolution. Proxies were received with:

Votes For

Percent

Votes Withheld

Percent

35,162,361

98.90

391,249

1.10

Plan of Arrangement
The proposed Plan of Arrangement is subject to final approval by the Court of Queen’s Bench of Alberta (the “Final Order”) and meeting the minimum listing requirements to have the preferred shares listed. The hearing to seek the Final Order approving the Plan of Arrangement has been set for July 5, 2017.

There are currently 58,662,892 common shares of the Corporation outstanding. Subsequent to the completion of the proposed Plan of Arrangement, there will be 43,934,032 common shares outstanding after 67,667 common shares held by odd lot shareholders are redeemed for $0.155 each in cash and 14,661,193 shares are exchanged for a total of 1,136,242 preferred shares.

Anyone trading in the shares of the Corporation are warned that upon completion of the proposed Plan of Arrangement, any common shares they acquire now until the completion of the Plan of Arrangement are subject to an automatic exchange of the common shares they acquire into preferred shares of the Corporation pursuant to the Plan of Arrangement.

Private Placement
Concurrent with the proposed Plan of Arrangement, the Corporation is pursuing a private placement of preferred shares for a maximum of $5 million. The board of directors of the Corporation has determined that it is in the best interests of the Corporation to reduce the minimum private placement from $3 million as originally contemplated to $2 million. The private placement is expected to close shortly after the completion of the Plan of Arrangement, on or about July 5, 2017. The board of directors of the Corporation have committed $770,000 to the private placement.

About Critical Control
Critical Control provides solutions for the collection, control and analysis of measurement and operational data related to oil and gas wells across North America. We provide services to capture the data, cloud-based software to visualize and manage it, and the business intelligence to make quicker and more informed operational decisions.

]]>Important Information Regarding Trading of Common Shareshttp://criticalcontrol.com/corporate/important-information-regarding-trading-common-shares/
Tue, 27 Jun 2017 15:58:04 +0000http://criticalcontrol.com/?p=2678CALGARY, ALBERTA, June 26, 2017 – Critical Control Energy Services Corp. (“Critical Control” or the “Corporation”) (TSX:CCZ) is providing an important update to investors buying common shares of the Corporation. Critical Control has proposed a plan of arrangement (the “Plan of Arrangement”), the details of which are contained in an information circular dated May 26, […]

]]>CALGARY, ALBERTA, June 26, 2017 – Critical Control Energy Services Corp. (“Critical Control” or the “Corporation”) (TSX:CCZ) is providing an important update to investors buying common shares of the Corporation.

Critical Control has proposed a plan of arrangement (the “Plan of Arrangement”), the details of which are contained in an information circular dated May 26, 2017 (the “Information Circular”) mailed to all shareholders of record as of May 25, 2017 for the Corporation’s Annual and Special Meeting of Shareholders to be held on June 29, 2017, and in press releases dated May 11, 2017, June 13, 2017, and June 20, 2017.

Under the proposed Plan of Arrangement, all shareholders must return a properly completed Letter of Transmittal and Election Form to Computershare Trust Company of Canada at its principal offices in Calgary or Toronto prior to the election deadline of 10:00 am (Calgary time), June 27, 2017 (the “Election Deadline”). Any shareholder who holds their common shares in a brokerage account, must contact their broker to advise their election such that the broker can complete the Letter of Transmittal and Election Form on their behalf prior to the Election Deadline.

All holders of common shares who have failed to elect to keep their common shares or exchange them for preferred shares by the Election Deadline, is at risk of having some or all of their common shares exchanged for preferred shares under the proposed Plan of Arrangement (the “Automated Conversion”).

ALL PURCHASERS OF COMMON SHARES OF THE CORPORATION TAKE NOTE:

A. ALL TRADES THAT SETTLE BEFORE THE ELECTION DEADLINE AND FOR WHICH THE PURCHASER FAILS TO MAKE A VALID ELECTION PRIOR TO THE ELECTION DEADLINE; AND

B. ALL TRADES THAT SETTLE AFTER THE ELECTION DEADLINE AND PRIOR TO THE COMPLETION OF THE PROPOSED PLAN OF ARRANGEMENT;

ARE ALL SUBJECT TO THE AUTOMATED CONVERSION.

About Critical Control
Critical Control provides solutions for the collection, control and analysis of measurement and operational data related to oil and gas wells across North America. We provide services to capture the data, cloud-based software to visualize and manage it and the business intelligence to make quicker and more informed operational decisions.

]]>Important Shareholder Information for Upcoming Proposed Plan of Arrangement – UPDATEhttp://criticalcontrol.com/corporate/important-shareholder-information-upcoming-proposed-plan-arrangement-2/
Wed, 21 Jun 2017 14:51:40 +0000http://criticalcontrol.com/?p=2674CALGARY, ALBERTA, June 20, 2017 – Critical Control Energy Services Corp. (“Critical Control” or the “Corporation”) (TSX:CCZ) is providing an important update to the proposed plan of arrangement (the “Plan of Arrangement”), the details of which are contained in the information circular dated May 26, 2017 (the “Information Circular”) mailed to all shareholders of record […]

]]>CALGARY, ALBERTA, June 20, 2017 – Critical Control Energy Services Corp. (“Critical Control” or the “Corporation”) (TSX:CCZ) is providing an important update to the proposed plan of arrangement (the “Plan of Arrangement”), the details of which are contained in the information circular dated May 26, 2017 (the “Information Circular”) mailed to all shareholders of record as of May 25, 2017 for the Corporation’s Annual and Special Meeting of Shareholders to be held on June 29, 2017.

Under the proposed Plan of Arrangement, all registered shareholders must return a properly completed Letter of Transmittal and Election Form to Computershare Trust Company of Canada in accordance with the instructions contained therein prior to the Election Deadline of 10:00 am (Mountain Standard Time), June 27, 2017.

Any shareholder who holds their common shares in a brokerage account, must contact their broker to advise their election such that the broker can complete the Letter of Transmittal and Election Form on their behalf prior to the Election Deadline.

Shareholders may either elect to:

exchange all or a portion of their Common Shares for a new series of Preferred Shares on the basis of 0.0775 Preferred Share for each Common Share held (the “Share Exchange”), up to the aggregate maximum of 29,992,500 Common Shares (the “Maximum Conversion Shares”), subject to proration; or

exchange none of their Common Shares into Preferred Shares (the “Status Quo Election”).

No fractional Preferred Shares will be issued; the nearest whole number of Preferred Shares will be issued, with fractions equal to 0.5 or more being rounded up.

Shareholders who elect to make a Share Exchange and who would receive fewer than 100 Preferred Shares on the exchange of their tendered Common Shares will receive a cash payment of $0.155 per tendered Common Share (the “Cash Consideration”).

Shareholders who fail to submit a Letter of Transmittal and Election Form and who hold 1,290 or fewer Common Shares will automatically receive the Cash Consideration (the “Minor Shareholders”).

If fewer than the Maximum Conversion Shares are voluntarily tendered for exchange pursuant to the Share Exchange, all of the Common Shares of holders who either: (i) failed to submit a Letter of Transmittal and Election Form (other than Minor Shareholders); or (ii) failed to validly make the Status Quo Election for all of their Common Shares (“Non-electing Shareholders”), will be exchanged for Preferred Shares on a pro rata basis until the Maximum Conversion Shares limit is reached (the “Automatic Share Conversion”).

If an Automatic Share Conversion is required, Non-electing Shareholders who receive fewer than 100 Preferred Shares on the pro rata exchange of their Common Shares will receive the Cash Consideration and will not receive Preferred Shares. If a Non-electing Shareholder receives the Cash Consideration, its redeemed Common Shares are excluded for the purpose of calculating the Maximum Conversion Shares.

If a registered Shareholder does not want to be subject to the Automatic Share Conversion, they must ensure that Computershare Trust Company of Canada receives their Letter of Transmittal and Election Form prior to the Election Deadline.

About Critical Control
Critical Control provides solutions for the collection, control and analysis of measurement and operational data related
to oil and gas wells across North America. We provide services to capture the data, cloud-based software to visualize
and manage it and the business intelligence to make quicker and more informed operational decisions.

Forward-Looking Information
This press release contains “forward-looking information” within the meaning of Canadian securities legislation.
Forward-looking information generally refers to disclosure about an issuer’s business, capital, or operations that is
prospective in nature, and includes future-oriented financial information about the issuer’s prospective financial
performance or financial position.

The forward-looking information in this press release relates to the proposed terms of the Plan of Arrangement. No
assurance can be given that the Plan of Arrangement will close on these terms or that the Plan of Arrangement will
close at all. Actual results could differ materially from those anticipated in this press release due to prevailing economic
conditions, failure to obtain the requisite regulatory and security holders approvals, and other factors, many of which
are beyond the control of the Corporation.

The Corporation assumes no obligation to update or revise the forward-looking information in this press release, unless
it is required to do so under Canadian securities legislation.

]]>Important Shareholder Information for Upcoming Proposed Plan of Arrangementhttp://criticalcontrol.com/corporate/important-shareholder-information-upcoming-proposed-plan-arrangement/
Wed, 14 Jun 2017 14:07:12 +0000http://criticalcontrol.com/?p=2661CALGARY, ALBERTA, June 13, 2017 – Critical Control Energy Services Corp. (“Critical Control” or the “Corporation”) (TSX:CCZ) has mailed an information circular dated May 26, 2017 (the “Information Circular”) to all shareholders of record as of May 25, 2017 for the Corporation’s Annual and Special Meeting of Shareholders to be held on June 29, 2017 […]

]]>CALGARY, ALBERTA, June 13, 2017 – Critical Control Energy Services Corp. (“Critical Control” or the “Corporation”) (TSX:CCZ) has mailed an information circular dated May 26, 2017 (the “Information Circular”) to all shareholders of record as of May 25, 2017 for the Corporation’s Annual and Special Meeting of Shareholders to be held on June 29, 2017 (the “AGM”).

At the AGM, one of the matters put to Shareholders will be a plan of arrangement whereby all common shareholders may elect to either keep their common shares or exchange all or some of their common shares for preferred shares of the Corporation (the “Plan of Arrangement”). Details of the proposed Plan of Arrangement and associated election are contained in the Information Circular mailed to shareholders and can also be found on www.sedar.com and the Corporation’s website at www.criticalcontrol.com.

Each shareholder must file an election by 10:00 am on June 27, 2017 to indicate whether they wish to keep their common shares or exchange all or part of their common shares for preferred shares under the proposed Plan of Arrangement. All registered shareholders must return a letter of transmittal contained in their meeting materials included with the Information Circular. All non registered shareholders who own shares through a broker, must contact their broker to arrange to make their election. SHAREHOLDERS ARE CAUTIONED THAT IF THEY DO NOT FILE AN ELECTION, SOME OR ALL OF THEIR COMMON SHARES MAY BE EXCHANGED FOR PREFERRED SHARES UNDER THE PROPOSED PLAN OF ARRANGEMENT.

Risks Related to the Formation of a Control Person
Given the potential reduction in the number of common shares outstanding pursuant to the proposed Plan of Arrangement, there is a risk that a single shareholder will hold more than 20% of the outstanding common shares of the Corporation post-arrangement, the formation of which would require shareholder approval. Accordingly, in order to facilitate the completion of the proposed Plan of Arrangement and obtain regulatory approval, no shareholder can own or control 20% or more of the outstanding common shares of the Corporation post-arrangement, inclusive of any warrants convertible into common shares of the Corporation.

Risks Related to Liquidity
Reference is made to the Liquidity and Capital Resources section of the Corporation’s Management Discussion and Analysis for Q1 2017. Specifically, available cash on hand combined with amounts available on the Corporation’s secured banking facility fell from $1.1 million as at December 31, 2016 to $0.5 million as at March 31, 2017. In order to improve liquidity, the Corporation is undertaking a private placement of preferred shares as disclosed in the press release of the Corporation dated May 11, 2017 (the “Private Placement”). The Private Placement is dependent, in part, upon the successful completion of the proposed Plan of Arrangement. In the event the Plan of Arrangement is not completed, the Corporation cannot complete the Private Placement and the Corporation will have to address the issue of liquidity in a different manner, the success of which cannot be assured.

Risks Related to Listing
The current market capitalization of the common shares of the Corporation is close to the minimum listing requirements of the Toronto Stock Exchange. The proposed Plan of Arrangement will reduce the number of common shares outstanding which would, in turn, further reduce the market capitalization of the common shares. In the event that the trading price of the common shares does not increase to offset the reduced number of shares, the common shares will not likely meet the continued listing requirements of the TSX after the proposed Plan of Arrangement. Additionally, depending upon the election made by shareholders under the proposed Plan of Arrangement, or the failure to elect, there is a risk that the number of public shareholders holding at least one board lot of common shares may fall below 150. In either such event, the continued listing of the common shares may be reviewed by the TSX. In the event the review determines that the common shares do not meet the minimum listing requirements, the TSX may notify the Corporation of such determination and provide a timeline for the Corporation to rectify such deficiency. In the event the price of the common shares does not increase in order for the common shares to meet the minimum listing requirements or the number of public shareholders holding at least one board lot remains below 150 and such deficiency cannot be otherwise addressed by the Corporation within the time period allotted by the TSX, the common shares may be subject to de-listing from the Toronto Stock Exchange and it will be necessary for the Corporation to seek to have the common shares of the Corporation trade on an alternative exchange, including but not limited to the TSX Venture Exchange. There is no assurance that such alternative listing, if necessary, will be successful.

Risks Related to Listing of the Preferred Shares
The completion of the proposed Plan of Arrangement is dependent upon conditional approval from the TSX for the listing of the preferred shares. Until the minimum listing requirements for the listing of the preferred shares are met, the proposed Plan of Arrangement cannot be completed. If the minimum listing criteria is met and the proposed Plan of Arrangement is completed, the preferred shares will be listed on the Toronto Stock Exchange only after the Exchange has received all required documentation from the Corporation. Therefore, even if the minimum listing requirements are met, the preferred shares may not be listed immediately upon the closing of the proposed Plan of Arrangement.

About Critical Control
Critical Control provides solutions for the collection, control and analysis of measurement and operational data related to oil and gas wells across North America. We provide services to capture the data, cloud-based software to visualize and manage it and the business intelligence to make quicker and more informed operational decisions.

]]>Critical Control Announces Private Placement and Plan of Arrangementhttp://criticalcontrol.com/corporate/critical-control-announces-private-placement-plan-arrangement/
Thu, 01 Jun 2017 19:55:45 +0000http://criticalcontrol.com/?p=2651CALGARY, ALBERTA, May 11, 2017 – Critical Control Energy Services Corp. (“Critical Control” or the “Corporation”) (TSX:CCZ) announces that it intends to complete a non-brokered private placement of units (the “Units”) consisting of a newly created class of Series A Preferred Shares (the “Preferred Shares”) and common share purchase warrants (the “Warrants”) for gross proceeds […]

]]>CALGARY, ALBERTA, May 11, 2017 – Critical Control Energy Services Corp. (“Critical Control” or the “Corporation”) (TSX:CCZ) announces that it intends to complete a non-brokered private placement of units (the “Units”) consisting of a newly created class of Series A Preferred Shares (the “Preferred Shares”) and common share purchase warrants (the “Warrants”) for gross proceeds of a minimum of $3,000,000 to a maximum of $5,000,000 (the “Offering”). Contemporaneously with the Offering, the Corporation intends on issuing $4,650,000 of Preferred Shares to the current common shareholders of the Corporation in exchange for some or all of their existing common shares (the “Arrangement”).

“The completion of the Offering will immediately improve the Corporation’s balance sheet, liquidity and cash flow,” said Alykhan Mamdani, President and CEO of the Critical Control. “In management’s opinion, the creation of the Preferred Share combined with both the Offering and the Arrangment improves the Corporation’s capital structure by providing greater long term flexibility to finance growth.”

The Corporation currently has no shares outstanding other than common shares. The Preferred Shares underlying the Offering and the Arrangement will have a $2.00 deemed value and a maximum of 4,825,000 Preferred Shares will be distributed pursuant to the Offering and the Arrangement. The Preferred Shares will entitle the holders to an 8% cumulative dividend paid quarterly, will be redeemable by the Corporation after 5 years from initial issuance, and the cumulative dividend rate shall be reset after the 5-year anniversary to be the Canada 5-year bond rate plus 5%, with a minimum rate of 8%.

The Offering
The Offering will be for a minimum of 1,500,000 and a maximum of 2,500,000 Units at $2.00 per Unit. Each unit shall consist of one Preferred Share with a $2.00 deemed value and one Warrant to acquire one common share of the Corporation for $0.20 per common share. Each Warrant shall expire 2 years from the date on which it is issued.

Any closing of subscriptions for the Offering (the “Closing”) is subject to the subscription of a minimum of 1.5 million units for minimum proceeds of $3.0 million. The Closing will also be subject to the completion of the Arrangement and the approval of the Toronto Stock Exchange to list the Preferred Shares on the Toronto Stock Exchange.

Management and Directors of the Corporation are expected to subscribe for 375,000 Units, for total gross proceeds of $750,000. Closing is expected to occur with the Arrangement on or about June 30, 2017.

The Offering is expected to be non-brokered and shall be completed upon reliance on exemptions from the prospectus requirements of applicable securities regulations. Subscribers to the Units shall have statutorily imposed hold periods attributed to the Preferred Shares acquired thereunder and to the common shares acquired from the issuance of the Warrants. The Offering may be subject to a finder’s fee.

Proceeds of the Offering will be used to reduce the Corporation’s bank debt.

The Arrangement
The Arrangement will allow existing holders of common shares of the Corporation to exchange any portion of their common shares for Preferred Shares on the basis of one Preferred Share for every 12.9 common shares they tender for conversion. This exchange ratio is based upon a conversion rate of $2.00 per Preferred Share and a price of $0.155 per common share, representing a premium of 14.8% over the closing price of the common shares on the Toronto Stock Exchange on May 11, 2017.

Under the Arrangement, holders of common shares will not be required to exchange their common shares under the Arrangement and may elect to keep some or all of their common shares. A maximum of 29,992,500 common shares will be exchanged for a maximum of 2,325,000 Preferred Shares under the Arrangement. In the event holders of common shares in aggregate elect to receive more than 2,325,000 Preferred Shares, the maximum number of Preferred Shares shall be distributed to them on a pari passu basis based upon their election. In the event the holders of common shares in aggregate elect to receive less than 2,325,000 Preferred Shares, the remaining Preferred Shares will be distributed pro rata to those holders of common shares who do not make a valid election subject to a maximum of 2,325,000 Preferred Shares being distributed pursuant to the Arrangement and in accordance with the aforementioned exchange ratio.

Details of the Arrangement will be distributed to the holders of the common shares in an information circular associated with the Corporation’s Annual and Special Meeting to be held in Calgary on June 29, 2017 (the “Meeting”). The Arrangement is expected to be completed on or about June 30, 2017 through a statutory plan of arrangement under section 193 of the Business Corporation Act (Alberta), which will be subject to court approval and approval of the shareholders of the Corporation at the Meeting. In addition, the Arrangement will also be contingent upon the Corporation reaching the minimum Offering.

About Critical Control
Critical Control provides solutions for the collection, control and analysis of measurement and operational data related to oil and gas wells across North America. We provide services to capture the data, cloud-based software to visualize and manage it and the business intelligence to make quicker and more informed operational decisions.

Forward-Looking Information
This press release contains “forward-looking information” within the meaning of Canadian securities legislation. Forward-looking information generally refers to disclosure about an issuer’s business, capital, or operations that is prospective in nature, and includes future-oriented financial information about the issuer’s prospective financial performance or financial position.

The forward-looking information in this press release relates to the proposed terms and anticipated benefits of the Arrangement and the Offering. No assurance can be given that the Arrangement or the Offering will close on these terms or that the Arrangement and the Offering will close at all. Actual results could differ materially from those anticipated in this press release due to prevailing economic conditions, failure to obtain the requisite regulatory and security holders approvals, and other factors, many of which are beyond the control of the Corporation.

The Corporation assumes no obligation to update or revise the forward-looking information in this press release, unless it is required to do so under Canadian securities legislation.

]]>Critical Control Announces First Quarter 2017 Financial Resultshttp://criticalcontrol.com/corporate/critical-control-announces-first-quarter-2017-financial-results/
Thu, 11 May 2017 16:38:44 +0000http://criticalcontrol.com/?p=2647CALGARY, ALBERTA, May 10, 2017 – Critical Control Energy Services Corp. (TSX: CCZ) today reported its financial results for the three months ended March 31, 2017. “The results of the business process reengineering undertaken by management in 2016 are evident in our improved margins and reduced general and administrative expenses in the quarter”, said Alykhan […]

]]>CALGARY, ALBERTA, May 10, 2017 – Critical Control Energy Services Corp. (TSX: CCZ) today reported its financial results for the three months ended March 31, 2017.
“The results of the business process reengineering undertaken by management in 2016 are evident in our improved margins and reduced general and administrative expenses in the quarter”, said Alykhan Mamdani. “While the uncertainty in the oil and gas industry continues, the changes we have made to our operations and the investment we have made in our software products enables the Company to weather the turbulence and the opportunity to grow.”

Revenue

The decline in the price of oil and gas since the fourth quarter of 2014 impacted the industry causing reduced expenditure in exploration, development and operations. As a consequence, the Corporation’s revenue declined to $7.6 million in 2017 compared to $9.0 million in 2016, a 15.6% overall decline.

Strong recurring revenue in the Corporation’s Software segment together with growth driven from the continued penetration of the Corporation’s software in both Canada and the United States offset declines from shut in wells and the cost saving measures implemented by industry. As a result, Software revenue fell by only 8.5% to $4.1 million in 2017 from $4.5 million in 2016.

Despite industry factors and the subsequent competitive environment, the Corporation’s recurring revenue from its Services business remained relatively steady generating US$2.9 million in revenue in 2017, a 12.4% decrease from the previous period. The Corporation’s revenue from fabrication of measurement related equipment for new wells hit the Corporation’s revenue the hardest causing non-recurring revenue in the Services business to fall by 75.9% to $0.1 million.
Gross margin

Management’s measures to reengineer the Corporation’s business to exit the downturn in a more competitive position continues to increase gross margin from 39.6% to 46.1%.

Gross margin in Software improved from 54.5% to 59.8% despite a strong competitive environment and pressures to provide price concessions during the downturn.

Despite the reduction of gross margin in the Corporation’s fabrication business from negative 27.9% in 2016 to negative 62.9% in 2017, the total gross margin in Services improved from 25.5% to 30.0%. This resulted from management’s focus on streamlining the operations in the first half of 2016.

Earnings and net earnings

The Corporation’s loss before tax dropped to less than $0.1 million from a loss of $1.4 million in 2016. This change was a result of decreased general and administrative costs in 2017 compared to results from 2016 which included a $0.3 million one-time reorganization expenses and a $0.7 million foreign currency loss.

Outlook and Guidance

The decline in energy prices resulted in oil and gas producers shutting in production, reducing operating costs associated with the Corporation’s services, demanding price reductions and in certain cases, filing for creditor protection. These factors combined with competitive pressures from other service companies negatively impacted the Corporation’s revenue through 2016.
Notwithstanding the foregoing, the Corporation has further penetrated its client base with its software solutions and reengineered its operations to reduce costs to maintain, and in some cases grow, its margins.

The impact of the Corporation’s internal business process reengineering and reorganization in 2016 are evident in the Corporation’s results in the first quarter of 2017 with improved gross margins and reduced general and administrative expenses. Management is optimistic that these margins are sustainable through 2017 at today’s commodity prices and will continue to improve in the event industry activity increases. Notwithstanding the foregoing, commodity prices or increased competitive pressures are unpredictable and a material change will affect
profitability.

Simultaneous with cost saving measures, the Corporation has continued its investment in enhancing its existing software portfolio and adding new software products to reduce energy producer’s cost and risk. Management intends on continuing this investment during 2017. The growth from these initiatives has enabled the Corporation to offset reduced revenue from its existing products during the downturn in 2016 and management expects this investment to differentiate the Corporation from its competitors and provide an avenue of growth regardless of
industry conditions in 2017. This expectation is based upon the Corporation’s ability to develop its software on a timely basis, bring it to market cost effectively and to successfully penetrate the Corporation’s existing client base with new software capabilities to address existing costs and operational risks.

Cash available to the Corporation in cash and availability on its secured lines of credit has declined from $1.1 million as at December 31, 2016 to $0.5 million as at March 31, 2017. This decline is attributed primarily to investment by the Corporation in capitalized research and development and the payment of costs associated with charges expensed in 2016 related to the restructuring necessary to increase gross margin and reduce general and administrative costs, the beneficial results of which can be seen in the current quarter. Payment of these
restructuring costs expensed in 2016 are expected to be materially complete by the end of second quarter of 2017 and the Corporation’s budget for capitalized research and development significantly declines during the course of 2017 and therefore Management expects that current cash flow from operations combined with cash available is sufficient to fund the operational obligations of the Corporation. Notwithstanding the forgoing, the ability of the Corporation to invest in additional research and development or complete existing research and development in the event existing projects get delayed or extended will be curtailed due to the Corporation’s access to capital. In such event, additional funds will be required to be raised by the Corporation through the issuance of debt, equity or a combination thereof, the success of which cannot be definitive.

About Critical Control
Critical Control provides solutions for the collection, control and analysis of measurement and operational data related to oil and gas wells across North America. We provide services to capture the data, cloud based software to visualize and manage it and the business intelligence to make quicker and more informed operational decisions.

“During 2016 oil and gas prices materially dropped, causing reduced industry spending, material numbers of wells being shut in and many oil and gas producers being unable to continue operations, all of which impacted our revenue,” said Alykhan Mamdani, President and CEO of Critical Control. “Notwithstanding these significant headwinds, management successfully reengineered its operations and further penetrated the market with its software, improving operational performance through improved margins and reduced general and administrative costs, which are sustainable once conditions improve.”

Revenue

The decline in the price of oil and gas since fourth quarter of 2014 impacted the industry causing reduced expenditure in exploration, development and operations. As a consequence, the Corporation’s revenue declined to $31.8 million in 2016 compared to $39.9 million in 2015, a 20.5% overall decline.

Strong recurring revenue in the Corporation’s Software segment together with growth driven from the continued penetration of the Corporation’s software in both Canada and the United States offset declines from shut in wells and the cost saving measures implemented by industry. As a result, Software revenue fell by only 12% to $16.9 million in 2016 from $19.2 million in 2015.

Despite industry factors and the subsequent competitive environment, the Corporation’s recurring revenue from its Services business remained steady generating $10.3 million in revenue in 2016, a 7% decrease from the previous year. The Corporation’s revenue from fabrication of measurement related equipment for new wells hit the Corporation’s revenue the hardest causing non-recurring revenue in the Services business to fall by 53% to $4.5 million.

Gross margin

Management’s measures to reengineer the Corporation’s business to exit the downturn in a more competitive position resulted in gross margin increasing from 36.2% to 40.0%.

Gross margin in Software improved from 51.9% to 55.7% despite a strong competitive environment and pressures to provide price breaks during the downturn.

Despite the downturn of gross margin in the Corporation’s fabrication business from 11.8% in 2015 to negative 45.9% in 2016, the total gross margin in Services improved from 21.7% to 22.1%. This is related to the improvement in recurring revenue gross margin from 21.3% to 25.4% which resulted from management’s focus on streamlining the operations in the beginning half of 2016.

Earnings and net earnings

The Corporation’s loss before tax improved to $3.0 million from a loss of $5.6 million in 2015. This change was a result of decreased general and administrative costs in 2016 compared to results from 2015 which included $3.6 million one-time reorganization expenses offset by a $1.1 million foreign currency gain.

Outlook and Guidance

The decline in energy prices resulted in oil and gas producers shutting in production, reducing operating costs associated with the Corporation’s services, demanding price reductions and in certain cases, filing for creditor protection. These factors combined with competitive pressures from other service companies negatively impacted the Corporation’s revenue in 2016.
Notwithstanding the foregoing, the Corporation has further penetrated its client base with its software solutions and reengineered its operations to reduce costs to maintain, and in some cases grow, its margins.

The impact of the Corporation’s internal business process reengineering and reorganization in 2016 are evident in the Corporation’s results in the last half of 2016 with improved gross margins and reduced general and administrative expenses. Management is optimistic that these margins are sustainable through 2017 and will continue to improve in the event industry activity increases. Notwithstanding the foregoing, commodity prices or increased competitive pressures are unpredictable and a material change will affect profitability.

Simultaneous with cost saving measures, the Corporation has continued its investment in enhancing its existing software portfolio and adding new software products to reduce energy producer’s cost and risk. Management intends on continuing this investment during 2017. This continued investment has enabled the Corporation to offset reduced revenue from its existing products during the downturn in 2016 and management expects this investment to differentiate the Corporation from its competitors and provide an avenue of growth regardless of industry conditions in 2017. This expectation is based upon the Corporation’s ability to develop its software on a timely basis, bring it to market cost effectively and to successfully penetrate the Corporation’s existing client base with new software capabilities to address existing costs and operational risks.

About Critical Control

Critical Control provides solutions for the collection, control and analysis of measurement and operational data related to oil and gas wells across North America. We provide services to capture the data, cloud based software to visualize and manage it and the business intelligence to make quicker and more informed operational decisions.